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Superannuation Guarantee Sting - Tina Zawila


I know many employers are still coming to grips with STP (Single Touch Payroll) which became compulsory for ALL employers back on 1 July 2019, however, there is another issue which has somewhat been looming in the background for years which will now come to the fore very quickly…the on time payment of employee superannuation guarantee contributions.


Compulsory superannuation has been around for 28 years, since it was announced in the 1991 Federal Budget, coming into effect a year later, and the principles of the legislation has remained relatively unchanged since then (aside from an increase in the rate).


Employers must pay the minimum superannuation guarantee (SG) for their employees into the correct fund by the due date (28 days after the end of the quarter), otherwise you must pay the SGC. The superannuation guarantee charge (SGC) is made up of the superannuation owing to the employee, interest on those contributions (currently 10%) and an administration fee of $20 per employee, per quarter.


The legislation is not negotiable – if you pay superannuation contributions late, even by a few days, or as we were told this week by the ATO, even an hour late, you, as the employer, are liable for SGC which, unlike superannuation paid on time, is not tax deductible.


With the introduction of STP where payroll information is reported to the ATO electronically every pay day, it will be easier than ever for the ATO to determine how much superannuation is due to be paid and by when. And we are starting to see the first shots fired from the ATO on this matter by issuing letters to employers that have breached the SGC legislation. And due to the way the legislation is written, no excuses can, or will, be accepted.


Modern accounting and payroll software and superannuation clearing houses assist employers to meet their compliance obligations; however, you still have to actually pay your obligations on time. The somewhat frustrating aspect of this modern system is that even though everything is electronic, including the EFT from your bank account to the superannuation clearing house or fund, you must actually attend to this up to a week before the due date to ensure the “instant” electronic data and funds reaches the superannuation fund on time. Remember, no excuses will be accepted.


If you need help with payroll and superannuation, please contact us at UHY Haines Norton Gladstone, our professional accountants can take care of all of your payroll and superannuation needs, to ensure you are always compliant with your obligations and to avoid any nasty surprises. Call us today on 49721300.

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